By Adam Oyer – KeyBank Central New York Home Lending Leader
April is Fair Housing Month, a time to talk about equity in home ownership. Owning a home is often thought of as a key part of the American Dream. It’s one of the largest and most meaningful purchases a person can make and can be an important part of building generational wealth. While buying a home can be an expensive, challenging, and oftentimes intimidating process, it may not be out of reach. Your bank can help make the financing of a home easier and within reach, but a new poll commissioned by KeyBank found that many people simply are not aware of home buyer assistance programs, tools, and resources that may be available.
KeyBank’s Fair Housing Month poll, which surveyed 1,000 homeowners in households earning less than $75,000 annually regarding their homebuying and lending experiences, had several important findings. Among them:
- Nearly one-third (31%) of respondents did not seek out any information or resources on homebuyer assistance programs. This may be because many homebuyers, particularly those with lower incomes, could be unaware of the existence of these offerings and the important role banks can play in providing access to them.
- Less than half (47%) of homeowners surveyed who purchased their homes in the past five years felt confident they received a fair market value price, pointing to a gap between the factors that are important to those homeowners and the reality of their homebuying experiences.
- Nearly one-third (30%) of homeowners surveyed are unsure whether they had an unfair experience when buying a home or are certain they had an unfair experience. This means that, among other things, some homeowners are left questioning whether they paid too much for their home.
While the Fair Housing Act of 1968 set a precedent to make the sale, rental, and home financing process nondiscriminatory, borrowers in underserved communities are often at a disadvantage when it comes to awareness of tools, resources, and affordable offerings available to help them achieve home ownership. Some things prospective home buyers can do include:
- Connect with your local banker on home lending opportunities available to you in your community and those which may best suit your specific needs. You may be able to qualify for lending assistance, which may mitigate certain costs and allow you to put the money you have saved toward other necessities. Many banks also offer loan products based on your income, location, or military status.
- Boost your home lending knowledge and access online resources, such as the Mortgage Calculator and Mortgage Checklist on Key.com to better understand your lending options and chart the best path forward. Additional resources, such as homebuyer education programs and seminars, may also be available through your bank or community.
- Know your down payment options. The down payment is the cash you must pay upfront for your home when taking out a mortgage. It’s typically 5-20 percent of the loan amount, but some loan options require less. Certain programs, like FHA loans or the Key Community Mortgage, are specifically designed for those who could benefit from a lower down payment.
- Many banks also offer programs that can help current homeowners as well. KeyBank has introduced the Key Opportunities Home Equity Loan, which provides borrowers with qualifying properties affordable terms to refinance their primary residence to obtain a lower interest rate, consolidate debt, finance home improvements, or tap into their home’s equity for any other purpose. The Key Opportunities Loan features a fixed rate, with no origination fee, and a first or second lien option for loans up to $100,000.
The home-buying process can be stressful, particularly in today’s turbulent economic market. Make sure you don’t overlook financial opportunities and are aware of all your bank can do to help you on your homebuying journey.
Making an Offer: Tips to Seal the Deal on Your Dream Home
The time has come for you to make an offer on your dream home. But before you start signing documents and wondering where to put the television, it’s time to get savvy about the offer itself. What goes into the strategy behind making an offer? And what makes sense for you, your finances, and your local real estate market?
Building the Offer
The offer is the beginning of the process that will negotiate all of the moving parts of your home purchase.
As you build your offer, you and your real estate agent should work through all of the details in the original home listing, local market data, and contingencies. If you have a conditional approval letter, include this with your package.
Determining Your Bottom Line
While building your offer, set a budget for how much you can reasonably afford. Set limits with your financial partners and family members for the maximum you’re willing to spend.
Now that you’ve set the price and know what you would like that price to include, it’s time to submit your offer to the seller and begin the final stage of purchase negotiations.
As you move toward finalizing the offer, there’s one final tool you can use as leverage: the closing date. If you find your offer bumping upward in price, think about the seller for a moment. There’s the potential that they’d like to close the sale as soon as possible. Speak with your real estate agent and mortgage loan officer about the possibility of offering an accelerated closing date. When comparing two identical offers, a buyer could very likely tip toward the one that would offer the fastest closing potential — especially if they’ve already found a new home or if they’re moving out of state.
With any luck, you’ll hear the words “accepted” from your real estate agent in no time. The goal of making an offer is to never forget the balance between what you’re offering and what you’ll receive for that financial commitment, your future home.
About the author: Adam Oyer is Home Lending Leader for KeyBank’s Central New York Market. NMLS #411171. He may be reached at either 315-425-8623 or [email protected].